Iran’s Insurance Industry Announces Major Overhaul, Introduces Driver-Centric Policy Model
In a significant development for Iran’s regulatory and financial landscape, the Central Insurance of Iran (Bimeh Markazi) has outlined a comprehensive set of reforms and initiatives aimed at modernizing the nation’s insurance sector. The announcements, made by the organization’s Chief, Parviz Khosrowshahi, signal a move towards greater efficiency, consumer protection, and technological integration.
Core Mandates and Supervisory Role
Mr. Khosrowshahi detailed the three primary missions of the Central Insurance: supervising the activities of the insurance industry, developing and expanding insurance coverage across the country, and managing the compulsory reinsurance program, which he described as the “anchor of certainty” for insurance companies.
“The objective of this oversight is to safeguard the interests of policyholders and to regulate company behavior to ensure correct and timely payment of claims,” Khosrowshahi stated. He emphasized that this supervisory role is crucial for maintaining stability and trust within the national economic framework.
Cracking Down on Violations and Enhancing Systems
Highlighting the commitment to rigorous oversight, the Chief reported that the most common violations by companies were related to claim payments. As a result of enforcement actions, six managers have been disqualified from their positions, and several companies lacking genuine insurance activity have been suspended.
To bolster these efforts, the Central Insurance has launched a pioneering supervision system utilizing 22 key indicators, representing a significant upgrade in regulatory technology and proactive monitoring capabilities.
Navigating Challenges with Domestic Innovation
Addressing the impact of external pressures on the industry, Khosrowshahi acknowledged that sanctions have presented serious challenges, particularly in procuring foreign reinsurance. However, he highlighted that these limitations have been effectively compensated for through domestic initiatives and innovations, demonstrating the sector’s resilience and capacity for self-reliance.
A Landshift: The Driver-Centric Third-Party Insurance Model
The most impactful announcement for the public concerns a fundamental update to the third-party auto insurance system. A new driver-centric model, which calculates premiums based on individual driver behavior and risk profile, is slated for implementation starting in the Iranian year 1405 (2026/2027).
Khosrowshahi explained that the ambitious project involves three key phases:
- The design of software and risk-score indicators.
- The amendment of regulations by the High Council of Insurance.
- The full implementation in premium calculations.
“The design phase and the preparation of the draft regulations have been completed,” he announced. “Following approval by the government, insurance premiums will be calculated based on driver behavior.”
This policy shift is designed to promote safer driving practices and create a more equitable insurance market for all citizens.
Industry Growth and Consumer Awareness
The official also provided context on the industry’s growth, noting that the insurance penetration rate in Iran currently stands at 2.3%. While this figure indicates potential for expansion compared to the global average of 7%, it is directly correlated with per capita income levels.
A noted increase in consumer complaints was attributed not to a decline in service, but to a positive trend: broader public awareness of their rights and the increased transparency of published complaint statistics. Khosrowshahi also recalled the sector’s role in assessing damages for over 4,200 insured and uninsured vehicles during the war, with a total value of 880 billion tomans, underscoring its critical function in national recovery efforts.